The input line is *closed* completely. I've even let water out of the tank, so it can't be full (can it?). So how come when we use the *cold* water faucets in the house, water leaks out of the *top* of the water heater?

It's not a constant leak. If no water is run anywhere, it all dries up. But if we run the laundry machine (on the *cold* water cycle, with the hot water valve *closed* as well), or even a faucet, then I find evidence of more water leaking from the water heater.Am I missing something about the way plumbing works? Why would this be happening?

The input valve is not fully closed due to calcium build up. Over the years, deposits form on the inside mating surfaces of the valve. When you turn on water elsewhere, back pressure is forcing water through. Try opening and closing the valve a couple of times, letting water run through it.

If that doesn't work, consider buying a compression plug at your local big box store, cut the pipe as close to the tank as possible and install the plug. Have your installers replace the valve along with the tank.

Thanks, Cold Steel.I did figure out that some of our ball valve faucets weren't fully turned to the cold side. I've fixed that mistake. If the leak continues, I'll try your solution.For the moment, I have placed a bucket under the primary leak path.At least our local utility has a fee adjustment policy if you present proof of a plumbing repair. I'll definitely have that for this month!

Another way to deal with it if the Water Heater is connected to the house plumbing with flexible connectors is to get a 4 or 6 inch pipe nipple (short length of pipe treaded on each end) and a roll of Teflon tape from the hardware store. Then with the WATER TURNED OFF detach both the in flow and out flow lines from the water heater and then connect them using the pipe nipple (wrap a short length of the Teflon over the pipe threads). Now you will have cold water coming out of both hot and cold faucets but once the water heater tank drains the leak should be gone.